Even if Trump loses, the anger that brought him to the fore will remain

How did the United States, a country with more than 200 years of experience with democracy, get to a situation where it is so close to electing someone who seems to be an old-fashioned fascist? To answer this, it’ll be useful to see the world from the point of view of the average American worker

Members of Zombies for Trump at a campaign event for US Republican presidential candidate Donald Trump, Michigan, October 31(AFP)

As I write, Donald Trump, a 70-year old with the maturity of a seven-year old and the sexual mores of a troubled adolescent, a man who makes no secret of the fact that he sees women as objects, to be grabbed or poked, or failing that, humiliated, a man who takes pride in his multiple bankruptcies and success in evading taxes, still has some chance of becoming the most powerful man in the world.

With his penchant for supermodels and other shiny trappings of the lives of the rich and famous, Trump is closer to the worst third-world dictators than an elected President of a first world country. And that, perhaps not accidentally, lines up very nicely with his views of democracy, perhaps best exemplified by his refusal to say that he will accept defeat and his happy tolerance of supporters who want Hillary Clinton, killed. In short he seems to be an old-fashioned fascist.

According to the polls, if the election were held today, this man would get a substantial majority of white male votes (and 70% or more the less-educated white male vote) and even among white women he would get a substantial 43 per cent of the vote, despite the fact that he probably refers to them as Miss Piggy or worse. How did the United States, a country with more than 200 years of experience with democracy, get here?

It is useful, in trying to resolve this conundrum, to see the world from the point of view of the average American worker. In 1970 he or she enjoyed a standard of living unprecedented in history anywhere in the world and every year things were getting better. Then all of a sudden wage growth stopped; and never restarted. The average American worker is paid barely more in real terms than he was in the late 1970s even though the country is vastly richer.

There are of course many reasons why this happened. Oil prices rose. Bretton Woods collapsed. And perhaps most obviously, the United States found out that it is hard to compete when your workers enjoy the highest living standards in the world. This is the period when Japanese cars, German machines and Korean steel flooded the world markets, buoyed by their lower labour costs and growing technological sophistication. Giants of US manufacturing, companies like Chrysler and US steel, faced bankruptcy and had to be bailed out.

Policy makers in the United States, however, weren’t about to tell workers that the American Dream was over. Instead they went on a hunt for the new magic potion. There was a brief failed Keynesian experiment, at which point economists of the political right came up with the idea that the solution was to massively cut taxes on the rich, ignoring the fact that the highest tax rates were actually over 90% in the go go years of American growth.

The resulting budget tightening of course meant that there was limited scope for increasing redistribution to ease the pain of low or non-existent wage growth, but the low taxes probably helped in making the United States the world leader in consulting, finance and the high-tech industries, which is where the rich are increasingly concentrated. The resulting explosion in inequality was reinforced by the rise of China and India, which meant that US producers could shift more and more of their work abroad.

How was it possible to get workers in a democracy to line up behind a political equilibrium that was so palpably iniquitous? A part of the answer is that inequality issues often got conveniently buried by more “urgent” concerns about abortion, gay marriage or the war on terror. Moreover whenever they did come up, workers were assured that good news is just round the corner, that it will only take one more tax cut or one more piece of deregulation or one more trade deal. And we economists, sadly, went along with it.

Not surprisingly in recent years there has been a growing feeling in the American working class that they were the victim of a giant conspiracy to help the elites. Trump (with Sanders) helped crystallise that feeling and has reaped the benefits. It might seem implausible that a rich-born New Yorker like Trump can be credible in delivering that message, but this is where the many ways that he offends us actually helps him. The so-called political correctness so reviled by Trump and his supporters, and by openly and credibly embracing the alternative—Trump not only says bad things about women, he does bad things to them—he has signaled to white men (and their allies among women) that he too is willing to actively resist that shift in balance of power towards women and minorities that they associate with that elite conspiracy. Hillary is hated partly because of her gender but also because she, despite coming from a relatively poor family, speaks and acts like a member of the elite.

It matters little at this point that what Trump is offering to his supporters is dross: A wall and a trade war that probably won’t happen and in any case won’t do much, plus more tax cuts for the rich. His supporters don’t care — they just want something else.

What is truly frightening is that even if Trump loses, the anger that has brought him to the fore will remain, to be harvested by the next Fascist or mad man, unless it is seriously addressed by complete revamp of America’s attitude towards taxes and redistribution. I am not sure Clinton can pull that off.